Freshworks (FRSH) Q2 2024 Earnings
Did FRSH Beat Earnings? Q2 2024 Results
Yes. Freshworks reported Q2 2024 earnings of $0.08 a share on Jul 30, 2024, beating the $0.06 consensus estimate by 33.3%. Revenue was $174.1M against a $169.0M estimate.
Freshworks posted a clean beat on both the top and bottom lines in the second quarter of 2024, with revenue climbing 20% year-over-year to $174.13 million against a consensus estimate of $169.01 million, while non-GAAP diluted EPS of $0.08 cleared the $0.06 analyst estimate by 33.33%. The standout driver behind the quarter was the June 6 completion of the Device42 acquisition, which bolstered Freshworks' IT Asset Management capabilities and signals a deliberate push into mid-market and enterprise accounts. Profitability also improved meaningfully, as the company's GAAP net loss narrowed to $20.18 million from $35.66 million a year ago, and CEO Dennis Woodside pointed to a 19% free cash flow margin as evidence of tightening financial discipline. Customer momentum held steady, with accounts contributing more than $5,000 in ARR growing 14% year-over-year to 21,744. Looking ahead, Freshworks guided Q3 revenue to $180.00 to $183.00 million and reaffirmed full-year 2024 revenue of $707.00 to $713.00 million, reflecting continued confidence in its AI-driven product portfolio.
- 20% year-over-year revenue growth (20% on constant currency basis)
- Increasing financial discipline with 19% free cash flow margin
- AI-powered solutions meeting customer needs
- 14% year-over-year growth in customers contributing more than $5,000 in ARR to 21,744
- Net dollar retention rate of 106%
“Freshworks delivered a solid Q2, growing revenue to $174.1 million with a free cash flow margin of 19%. Our results reflect our increasing financial discipline and our ability to meet the needs of customers with our AI-powered solutions. With clear strategic priorities in place, we are well positioned to seize the massive opportunity in front of us.”
Freshworks CEO, on the earnings call
What Was Freshworks's Outlook in Q2 2024?
For Q3 2024, Freshworks expects revenue of $180.0–$183.0 million (17–19% YoY growth), non-GAAP income from operations of $13.0–$15.0 million, and non-GAAP diluted EPS of $0.07–$0.08. For full year 2024, the company expects revenue of $707.0–$713.0 million (18.5–19.5% YoY growth), non-GAAP income from operations of $60.0–$66.0 million, and non-GAAP diluted EPS of $0.32–$0.34. Estimates include Device42 results and are based on exchange rates as of July 26, 2024.
FRSH YoY Financials
| Metric | Q2 2024 | Q2 2023 | Year over year |
|---|---|---|---|
| Revenue | $174.1M | $145.1M | +20.0% |
| Gross Profit | $146.0M | $120.2M | +21.4% |
| Operating Income | −$43.8M | −$44.3M | −1.2% |
| Net Income | −$20.2M | −$14.1M | +43.4% |
Figures from SEC filings and company reports. Not investment advice.